# EUR-Lex - 52013PC0449 - EN

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# 52013PC0449

**Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on electronic invoicing in public procurement /* COM/2013/0449 final - 2013/0213 (COD) */**

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EXPLANATORY MEMORANDUM

1.           CONTEXT OF THE PROPOSAL

·
Policy context

A shift towards paperless public
administration, particularly in its cross-border dimension, is an important
objective for the European Union and the Member States. E-invoicing is a particularly
promising area to help achieve this objective.

The widely-acknowledged benefits of
e-invoicing have led several EU Member States (Denmark, Austria, Sweden and Finland) to require the submission of e-invoices in public procurement in all or
part of the public sector. However, these bottom-up initiatives are for the
most part based on national standards, most of which are not interoperable. As
such, they lead to an increase in complexity and costs for firms wishing to
participate in cross-border procurement, and thereby generate market access
barriers. The overall result is that the adoption of e-invoicing in Europe is still very limited, accounting for 4 to 15% of all invoices exchanged. An
initiative in the area of e-invoicing in public procurement would prevent the
further fragmentation of the internal market and facilitate the uptake of
e-invoicing. Considering the fact that public procurement covered by the Public
Procurement Directives represents roughly 3.7% of EU GDP, the implementation of
an initiative aimed at eliminating market access barriers in e-invoicing in
public procurement would make the public sector a 'lead market' in this area
and spearhead its wider use in the economy.

Over the last couple of years, a
significant number of actors have called for action at the European level to
stimulate the e-invoicing market across the EU, especially with regards to the
exchange of invoices by governments. In the Communication "Reaping the
benefits of e-invoicing for Europe", COM(2010) 712, the Commission has
called for e-invoicing to become the predominant invoicing mode in the EU by
2020. In a resolution in April 2012, the European Parliament called for making
e-invoicing compulsory in public procurement by 2016, while Member States have
called for measures to promote e-invoicing at the Informal Competitiveness
Council of February 2012 and in the European Council Conclusions of June 2012.
The occasion therefore seems ripe to undertake the proposed initiative on
e-invoicing in public procurement and effectively remove the market access
barriers caused by insufficient e-invoicing interoperability.

A proposal in this area would also
complement the on-going modernisation of EU public procurement rules, a key
action under the “Single Market Act I”, in particular with regard to the
proposals on a full transition to e-procurement. Finally, action on promoting
the uptake of e-invoicing in public procurement is seen by the Commission as a
priority. This is reflected in the inclusion of an initiative on e-invoicing in
public procurement in the “Single Market Act II” as one of its Key Actions.

·
Links with standardisation issues

The proposal foresees that a new European
e-invoicing standard will be drawn by the relevant European standard-setting
body, in this case the European Committee for Standardisation (CEN). This will
be done on the basis of a mandate by the European Commission which will be
prepared at a later stage. The mandate will include a list of minimum
requirements which the standard will have to incorporate. The work will then be
carried out in line with the provisions of Regulation (EU) No 1025/2012.

2.           RESULTS OF CONSULTATIONS
WITH THE INTERESTED PARTIES AND IMPACT ASSESSMENTS

·
Consultations with the interested parties

The content of this proposal builds on
extensive consultations with stakeholders. Two meetings of the European Multi
Stakeholder Forum (EMSF) on e-invoicing were held in Brussels (on 26 September
2012 and 7 March 2013) and provided an important forum for discussing the
building blocks of the potential EU initiative on e-invoicing in public
procurement. The discussion papers of four Activity Groups of the EMSF provided
practical feedback from the representatives of national multi-stakeholder
forums and practitioners, such as service providers and firms. Additionally, a
questionnaire was circulated among the members of the EMSF which attempted to
gather data on existing e-invoicing systems, and their effectiveness, costs and
benefits. The 20 replies which were received (19 from national fora and one
from a standards-setting body) were also extensively used in the Impact
Assessment.

The content of the initiative was presented
and discussed with the Advisory Committee for Public Contracts (ACPC),
comprising of Member State representatives, during a meeting on 19 September
2012. More informal bilateral meetings also took place with representatives of
various industry associations, including the European E-invoicing Service
Providers Association (EESPA), Business Europe and the European Association of
Craft, Small and Medium-sized Enterprises (UEAPME).

Finally, an on-line consultation via the
Interactive Policy Making tool (IPM) was held between 22 October 2012 and 14
January 2013 to gather information on current usage of e-invoicing and opinions
concerning a potential EU initiative in this area. The public response to the
consultation was very positive, with more than 700 replies submitted.

The various consultations with stakeholders
provided the Commission with a good cross-section of the views held by the
different stakeholders.

·
Impact Assessment

The Impact Assessment was submitted to the
Impact Assessment Board (IAB) in February 2013. During the meeting of 20 March
2013, the IAB raised a number of issues which in the board’s opinion would need
to be addressed further, and requested a resubmission of the Impact Assessment.

The revised Impact Assessment was
resubmitted to the IAB on 19 April 2013. The main modifications in response to
the opinion of the IAB concerned the strengthening of the problem definition
and the subsidiarity and proportionality analysis, the improvement of the
impacts analysis and better presentation of stakeholder views.

On the 8th of May 2013, the IAB
issued a positive opinion.

After having analysed five different
options, the Impact Assessment concluded that the most appropriate solution is
to impose on contracting authorities and contracting entities an obligation to
accept the reception of electronic invoices complying with a new common European
invoicing standard as of a particular date. This would help to overcome the
fragmentation inherent in the current patchwork of national e-invoicing systems
and guarantee the integrity of the internal market. The chosen approach would
combine the strong stimulus of an obligation to ensure interoperability in
e-invoicing in public procurement with a more flexible approach as to the most
appropriate means of ensuring the use of e-invoicing as such.

The final Impact Assessment report and its
executive summary are published with this proposal.

3.           LEGAL ELEMENTS OF THE
PROPOSAL

·
Legal basis

The proposal is based on Article 114 of the
Treaty on the Functioning of the European Union (TFEU). By providing for the
establishment of a common European standard and obliging Member States to
ensure that contracting authorities and contracting entities do not refuse the
reception of electronic invoices complying with such European standard, this
proposal will remove market access barriers in cross-border public procurement
and obstacles to trade. It will therefore improve the conditions for the
functioning of the internal market.

·
Subsidiarity principle

According to the principle of subsidiarity,
the Union can act only if and in so far as the objectives of the proposed
action cannot be sufficiently achieved by the Member States, but can be better
achieved at EU level. For the reasons detailed below, EU action is needed to
remove market barriers and obstacles to trade deriving from the existence of
different national rules and standards as well as to ensure interoperability.
Hence, the proposal complies with the subsidiarity principle. The number of
existing standards, requirements, and solutions remains very large and
e-invoicing networks appear to be growing more, not less, entrenched along
national boundaries. The bottom-up initiatives from Member States have
aggravated the interoperability problem, as more e-invoicing standards have
emerged on the market, further increasing the costs and complexity of ensuring
interoperability. As a consequence, actions undertaken by Members States are
not sufficient to ensure e-invoicing interoperability in cross-border
procurement.

The rationale for an EU action stems from
the transnational nature of the problem of insufficient interoperability
between national (and proprietary) e-invoicing systems. Given the cross-border
nature of public procurement transactions covered by the Public Procurement Directives
and the lack of meaningful results of some Member States’ efforts to resolve
the interoperability issues, an EU action on e-invoicing in public procurement
seems to be the only solution available to co-ordinate their actions and to
prevent further fragmentation of the internal market. Furthermore, only the EU
can act as an unbiased arbiter in the discussion on interoperability and
objectively recommend the best approach to eliminating market barriers.

There is little indication that, without EU
action, the current situation concerning e-invoicing in public procurement will
change or improve in the foreseeable future.

·
Proportionality principle

The proposal complies with the
proportionality principle since it does not go beyond what is necessary in
order to achieve the objective of ensuring the proper functioning of the
internal market.

Different policy options have been assessed
in the Impact Assessment, leading to the conclusion that the preferred option
is also optimal in terms of proportionality - the chosen approach would combine
the strong stimulus of an obligation to ensure interoperability in e-invoicing
in public procurement with a more flexible approach as to the most appropriate
means of ensuring the use of e-invoicing as such.

·
Choice of instruments

The choice of legal form for the
Commission's legislative proposal is determined both by the chosen legal basis
and by the content of the proposal. As mentioned previously, Article 114 TFEU
is the appropriate legal basis for this proposal. In principle, this article
leaves open the choice of either a directive or a regulation as the legal form
of a proposal. However, since the objective of the proposal can sufficiently be
achieved by imposing on the Member States an obligation of result while leaving
them the choice of form and methods, the choice of a directive is the most
appropriate.

·
Transposition measures and explanatory
documents

National measures at different levels
(legislative, regulatory, administrative and technical) are likely to be needed
in order to transpose this Directive and to concretely enable contracting
authorities and contracting entities to apply it. Only Member States can
explain how these different measures transpose the Directive and how they
interact each with the others. Hence, the notification of transposition
measures needs to be accompanied by such explanatory documents.

4.           BUDGETARY IMPLICATION

All budgetary implications linked to the
development of a European standard by the appropriate European standardisation
organisation are already covered by the provisions of Regulation (EU) No 1025/2012.
This proposal has no additional financial impact over and beyond the resources
already allocated to the standardisation actions in the current and the future
Multiannual Financial Framework.

2013/0213 (COD)

Proposal for a

DIRECTIVE OF THE EUROPEAN PARLIAMENT
AND OF THE COUNCIL

on electronic invoicing in public
procurement

(Text with EEA relevance)

THE EUROPEAN PARLIAMENT AND THE
COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the
Functioning of the European Union, and in particular Article 114 thereof,

Having regard to the proposal from the
European Commission,

After transmission of the draft legislative
act to the national Parliaments,

Having regard to the opinion of the
European Economic and Social Committee[1],

Having regard to the opinion of the
Committee of the Regions[2],

Acting in accordance with the ordinary
legislative procedure,

Whereas:

(1)       Several global, national,
regional and proprietary standards on electronic invoices exist and are
currently used in Member States. None of these standards prevails, and most of
them are not interoperable.

(2)       In the absence of a common
standard, Member States decide, when promoting the use of electronic invoices
in public procurement or making it mandatory, to develop their own technical
solutions based on separate national standards. Hence, the number of different
standards coexisting across Member States is increasing and is likely to
continue increasing in the future.

(3)       The multiplicity of
non-interoperable standards results in excessive complexity, legal uncertainty
and additional operating costs for economic operators using electronic invoices
across Member States. Economic operators wishing to carry out cross-border
procurement activities are often required to comply with a new e-invoicing
standard each time they access a new market. By discouraging economic operators
from undertaking cross-border procurement activities, the divergent legal and
technical requirements concerning electronic invoices constitute market access
barriers in cross-border public procurement and obstacles to trade. They obstruct
the fundamental freedoms and thus have a direct effect on the functioning of
the internal market.

(4)       Those obstacles to intra-Union
trade are likely to increase in the future as more non-interoperable national
and proprietary standards are developed and as the use of electronic invoices
in public procurement becomes more widespread or is made mandatory in Member
States.

(5)       Obstacles to trade
deriving from the co-existence of several legal requirements and technical
standards on electronic invoices and from the lack of interoperability should
be removed or reduced. In order to achieve this objective, a common European
standard for the semantic data model of the core electronic invoice should be
developed.

(6)       The Commission should
apply the relevant provisions of Regulation (EU) No 1025/2012 of the European
Parliament and of the Council of 25 October 2012 on European standardisation[3] to request the relevant
European standardisation organisation to draft a European standard for the
semantic data model of the core electronic invoice. In its request to the
relevant European standardisation organisation, the Commission should require
that such European standard is technologically neutral, in order to avoid any
distortion of competition. Since electronic invoices may contain personal data,
the Commission should also require that such European standard guarantees
personal data protection in accordance with Directive 95/46/EC of 24 October
1995 on the protection of individuals with regard to the processing of personal
data and on the free movement of such data[4].
In addition to these minimum requirements, the Commission should determine, in
its request to the relevant European standardisation organisation, further
requirements as to the content of such European standard and a deadline for its
adoption.

(7)       The European standard for the
semantic data model of the core electronic invoice should build on existing
specifications, including in particular those developed by European or
international organisations such as CEN (CWA 16356 and CWA 16562), ISO
(Financial Invoice based on the ISO 20022 methodology), and UN/CEFACT (CII v.
2.0). It should not require electronic signatures. Such European standard
should define semantic data elements referring to, in particular, complementary
seller and buyer data, process identifiers, invoice attributes, invoice item
details, delivery information, payment details and terms. It should also be
compatible with the existing standards for payments in order to allow for
automatic processing of payments.

(8)       Where the European
standard drawn up by the relevant European standardisation organisation
satisfies the requirements contained in the Commission’s request, the
references of such European standard should be published in the Official
Journal of the European Union

(9)       Contracting authorities
and contracting entities should not refuse the reception of electronic invoices
which comply with such common European standard on the grounds of
non-compliance with other technical requirements (for example national or
sector specific requirements).

(10)     This Directive should apply
to electronic invoices received by contracting authorities and contracting
entities and issued as a result of the performance of contracts awarded in
accordance with Directive [replacing Directive 2004/18/EC of the European
Parliament and of the Council of 31 March 2004 on the coordination of
procedures for the award of public works contracts, public supply contracts and
public service contracts[5]],
Directive [replacing Directive 2004/17/EC of the European Parliament and of the
Council of 31 March 2004 coordinating the procurement procedures of entities
operating in the water, energy, transport and postal services sectors[6]], or Directive 2009/81/EC of
the European Parliament and of the Council of 13 July 2009 on the coordination
of procedures for the award of certain works contracts, supply contracts and
service contracts by contracting authorities or entities in the fields of
defence and security, and amending Directives 2004/17/EC and 2004/18/EC[7].

(11)     The goal of
interoperability is to allow information to be presented and processed in a
consistent manner between business systems, regardless of their technology,
application or platform. Full interoperability includes the ability to
interoperate in terms of content (semantic), format (syntax), and transmission.
Semantic interoperability implies that the precise meaning of the exchanged
information is preserved and well understood in an unambiguous manner,
independently of the way in which it is physically represented or transmitted.

(12)     By ensuring semantic interoperability
and improving legal certainty, this Directive will also promote the uptake of
electronic invoicing in public procurement, thereby allowing Member States,
contracting authorities, contracting entities, and economic operators to gain
significant benefits in terms of savings, environmental impact, and reduction
of administrative burdens.

(13)     The European Council, in its
conclusions of 28 and 29 June 2012, stated that priority should be given to
measures aimed at further developing cross-border online trade, including by
facilitating the transition to electronic invoicing.

(14)     The European Parliament in
its resolution of 20 April 2012 pointed at market fragmentation resulting from
national rules on electronic invoicing, underlined the substantial benefits
offered by electronic invoicing, and stressed the importance of legal
certainty, a clear technical environment and open and interoperable electronic invoicing
solutions based on common legal requirements, business processes and technical
standards. For these reasons, the European Parliament called on making
electronic invoicing in public procurement mandatory by 2016.

(15)     The European Multi-stakeholder
Forum on Electronic Invoicing (e-invoicing) set up by Commission Decision of 2
November 2010[8]
adopted a Recommendation on interoperability for electronic invoicing by the
use of a semantic data model in [month] 2013.

(16)     Since contracting
authorities and contracting entities will be able to accept electronic invoices
which comply with standards other than the common European standard, as well as
paper invoices unless otherwise provided in national legislation, this
Directive does not place any additional costs or burden on enterprises,
including micro, small and medium-sized enterprises in the meaning of
Commission Recommendation 2003/361/EC of 6 May 2003 concerning the definition
of micro, small and medium-sized enterprises[9].

(17)     Rules on electronic invoicing
are already contained in Council Directive 2006/112/EC of 28 November 2006 on
the common system of value added tax[10].
It should be ensured that the conditions for issuing and accepting electronic
invoices for VAT purposes remain unaffected by any provisions in this
Directive.

(18)     In order to allow contracting
authorities and contracting entities to take the technical measures that,
following the establishment of the European standard, are necessary to comply
with the provisions of this Directive, a transposition deadline of 48 months is
justified.

(19)     Since the objectives of
removing market barriers and obstacles to trade deriving from the existence of
different national rules and standards and of ensuring interoperability cannot
sufficiently be achieved by the Member States and can therefore be better
achieved at Union level, the Union may adopt measures, in accordance with the
principle of subsidiarity as set out in Article 5 of the Treaty on European
Union. In accordance with the principle of proportionality, as set out in that
Article, this Directive does not go beyond what is necessary in order to
achieve those objectives.

(20)     In accordance with the
Joint Political Declaration of Member States and the Commission of 28 September
2011 on explanatory documents[11],
Member States have undertaken to accompany, in justified cases, the
notification of their transposition measures with one or more documents
explaining the relationship between the components of a directive and the
corresponding parts of national transposition instruments. With regard to this
Directive, the legislator considers the transmission of such documents to be
justified,

HAVE ADOPTED THIS DIRECTIVE:

Article 1
Scope

This Directive shall apply to electronic invoices
issued as a result of the performance of contracts awarded in accordance with
Directive [replacing Directive 2004/18/EC], Directive [replacing Directive
2004/17/EC], or Directive 2009/81/EC.

Article 2
Definitions

For the purposes of this Directive, the
following definitions shall apply:

(1)
‘electronic invoice’ means an invoice that has
been issued and received in any electronic format;

(2)
‘semantic data model’ means a structured and
logically interrelated set of terms and meanings that specify the content
exchanged in electronic invoices;

(3)
‘core electronic invoice’ means a subset of
information contained in an electronic invoice that is essential to enable
cross-border interoperability, including the necessary information to ensure
legal compliance;

(4)
‘contracting authorities’ means contracting
authorities as defined in Article [2] of Directive [replacing Directive
2004/18/EC];

(5)
‘contracting entities’ means contracting
entities as defined in Article [4] of Directive [replacing Directive
2004/17/EC];

(6)
‘European standard’ means a European standard as
defined in Article 2(1) of Regulation (EU) No 1025/2012.

Article 3
Establishment of a European standard

1.           The Commission shall
request the relevant European standardisation organisation to draw up a
European standard for the semantic data model of the core electronic invoice.

The Commission shall require that the European
standard for the semantic data model of the core electronic invoice be technologically
neutral, and guarantee personal data protection in accordance with Directive
95/46/EC.

The request shall be adopted in accordance with
the procedure laid down in Article 10(1) to (5) of Regulation (EU) No 1025/2012.

2.           Where the European
standard drawn up following the request referred to in paragraph 1 satisfies
the requirements contained therein, the Commission shall publish the reference
to such European standard in the Official Journal of the European Union.

Article 4
Electronic invoices complying with the European standard

Member States shall ensure that contracting
authorities and contracting entities do not refuse to receive electronic
invoices which comply with the European standard whose reference has been
published pursuant to Article 3(2).

Article 5
Directive 2006/112/EC

This Directive is without prejudice to the
provisions of Council Directive 2006/112/EC.

Article 6
Transposition

1.           Member States shall bring
into force the laws, regulations and administrative provisions necessary to
comply with this Directive by 48 months following the entry into force at the
latest. They shall forthwith communicate to the Commission the text of those
provisions.

When Member States adopt those provisions, they
shall contain a reference to this Directive or be accompanied by such a
reference on the occasion of their official publication. Member States shall determine
how such reference is to be made.

2.           Member States shall
communicate to the Commission the text of the main provisions of national law
which they adopt in the field covered by this Directive.

Article 7
Review

The Commission shall review the effects of
this Directive on the internal market and on the uptake of electronic invoicing
in public procurement and report thereon to the European Parliament and the
Council by 30 June 2023. Where appropriate, the report shall be accompanied by
a legislative proposal.

Article 8
Entry into force

This Directive shall enter into force on
the twentieth day following that of its publication in the Official Journal
of the European Union.

Article 9
Addressees

This
Directive is addressed to the Member States.

Done at Brussels,

For the European Parliament                       For
the Council

The President                                                 The
President

[1]               OJ C , , p. .

[2]               OJ C , , p. .

[3]               OJ L 316, 14.11.2012, p. 12.

[4]               OJ L 281, 23.11.1995, p. 31.

[5]               OJ L 134, 30.4.2004, p. 114.

[6]               OJ L 134, 30.4.2004, p. 1.

[7]               OJ L 216, 20.8.2009, p. 76.

[8]               OJ C 326, 3.12.2010, p. 13.

[9]               OJ L 124, 20.5.2003, p. 36.

[10]             OJ L 347, 11.12.2006, p. 1.

[11]             OJ C 369, 17.12.2011, p. 14.